Teekay LNG now a corporation

Thursday, 10 January 2019
Free Read

Teekay GP, the general partner of Teekay LNG Partners, recently authorised a common unit repurchase programme to buy up to $100 mill of Teekay LNG’s common units.

These common units may be repurchased in the open market or privately-negotiated transactions or otherwise at times and prices considered appropriate by the Partnership. The timing of any purchases and the exact number of common units to be purchased under the programme will be dependent on market conditions and other factors.

The Partnership also revealed the outcome of the special meeting of common unitholders held in mid-December. All proposals, including the proposal to allow Teekay LNG to elect to be treated as a corporation, instead of a partnership, for US federal income tax purposes, were approved by unitholders.

As a result, from 1st January, 2019, Teekay LNG is now treated as a corporation for and common and preferred unitholders will receive Form 1099s instead of Schedule K-1s relating to distributions taxable as dividends commencing this year.

Teekay LNG remains a master limited partnership, and all other provisions of the Partnership’s limited partnership agreement are still in effect.

Mark Kremin, President and CEO of Teekay Gas Group, said at the time. “We are pleased that unitholders voted in favour of the amendment to our US tax structure effective for the 2019 taxation year, as we continue to believe that this will make Teekay LNG a more attractive investment, particularly for larger institutional investors.”

Teekay GP also announced that it had declared cash distributions of $0.5625 per unit on the Series A preferred units and $0.5313 per unit on the Series B preferred units for the period from 1st October, 2018 to 31st December, 2018.

The cash distributions are payable on 15th January, 2019 to all unitholders of record as at 31st December, 2018.

In early January, Teekay declared a cash distribution of $0.14 per common unit for the quarter ended 31st December, 2018, which will be a 2019 reportable event for US tax purposes, and will be subject to Form 1099 reporting, instead of a Schedule K-1.

It is payable on 8th February, 2019 to all common unitholders of record on 1st February, 2019.

The Partnership expects to increase its quarterly common unit distribution by 36% to $0.19 per unit, commencing with the first quarter of 2019 distribution to be paid in May, 2019.

All future common unit distributions are expected to be reported on Form 1099 for US tax purposes in line with the company’s new status. 

Related Video

Free Read